New Palestinian Leadership Tests U.S. Diplomacy

Now that the militant Hamas movement is set to take over the Palestinian government, the debate intensifies about whether to give financial aid. International donors are trying to head off a financial crisis in the Palestinian authority but the Bush administration wants a united front against Hamas.

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International donors are trying to head off a financial crisis in the Palestinian Authority. But the election victory of Hamas is making for some tricky negotiations. The Bush administration is trying to keep a united front on Hamas, which the U.S. considers a terrorist organization. The administration says any future Palestinian government must recognize Israel and must renounce violence if it wants outside support. NPR's Michele Kelemen reports.

MICHELE KELEMEN reporting:

The warnings have been stark. Special Middle East Envoy James Wolfensohn wrote recently that the Palestinian Authority needs $60 to $80 million dollars just to cover salaries and will need about $280 million dollars to cover expenses before a Hamas-led government is expected to be in place by March.

Karen Abu Zayd, head of a United Nations Agency that helps Palestinian refugees, was also ringing alarm bells today, though her agency is not expected to face any aid cutoff.

Ms. KAREN ABU ZAYD (United Nations Relief and Work Agency): We think the refugees will be well looked after in this situation, but if there's a cutback on salaries being paid for non-refugees, for teachers who teach non-refugees, if kids are not in school, if doctor's aren't paid, then this is going to create a humanitarian crisis, you know. This will be a crisis.

KELEMEN: This week the European Union announced about $145 million dollars in aid, some $20 million of it for Palestinian government salaries. EU External Relations Commissioner Benita Ferrera-Waldner explained that some of the aid will also be used for electricity bills to hold over the caretaker Palestinian government.

Ms. BENITA FERRERA-WALDNER (External Relations Commissioner, European Union): Our payment is a contribution to stability. On the one hand, stability for the population, and on the other hand, we are helping Mahmoud Abbas in this very crucial moment.

KELEMEN: That was the international plan, to make sure Abbas's caretaker government can function. But as Wolfensohn pointed out, Israel decided to withhold millions of dollars in tax and customs revenue. The United States has also asked for $50 million dollars back, money that was due to be used for infrastructure projects.

State Department spokesman Adam Ereli says the U.S. is trying to get European and Arab states to fill the current spending gap, but also wants to keep up the pressure on Hamas, as it tries to form a new government.

Mr. ADAM ERELI (State Department Spokesman, United States): Our diplomacy is geared towards getting Hamas to make the right choice, to take its foot out of a camp of terror and put them both firmly in the camp of peace and negotiation and respectability in the international community.

KELEMEN: The big task for the Bush Administration is whether it can maintain this approach once a Hamas-led government is in place. European officials have made clear that they will want to see what the government looks like and what it does before making any future judgments about aid.

Secretary of State Condoleezza Rice also heard calls for patience on her recent trip to the Middle East, according to Robert Malley of the International Crisis Group.

Mr. ROBERT MALLEY (International Crisis Group): What Condoleezza Rice heard back from her Arab interlocutors is, don't count on us to try to strangle Hamas and to try to put so much pressure on it that this whole experiment is going to fail. We want to give Hamas time to evolve. We want to see whether, with the right mixture of carrots and sticks, we can get them to moderate their positions and to put in place the kind of government that the international community can deal with.

KELEMEN: Scott Lasensky, of the U.S. Institute of Peace, says it will take time for a real international strategy to crystallize.

Mr. SCOTT LASENSKY (United States Institute of Peace): Is it going to be isolate and undermine a Hamas-led Palestinian Authority, maybe even before a government is formed? Or is it going to be a strategy of engage and change, where we come up with tasks and benchmarks and we try to give the government a chance?

KELEMEN: Lesensky predicts something in between. And while donors grapple with these questions, he says they should also think more broadly about how best to aid the Palestinians in a way that would promote state building, not a culture of dependency.

Michele Kelemen, NPR News, Washington.

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